That all sounds about right to me...

The Conventional Wisdom never actually talks about the Japanese Bubble in detail - much as Serious People are already learning now to talk about the deficit and ignore the bubble that precipitated the latest crisis.

One thing that is clear to me from a number of ET discussions that doesn't seem to have made much mileage elsewhere (except Naked Capitalism some days) is that a number of things interacted:

• deregulation
  
• the resurrection of old tools from the 20s (typically called "financial innovation")
  

 - the networked economy (which allowed the tools to grow further than in the 20s)
- the structure of the banking system

The effect was that far more than ever in the past, money creation was in the hands of the banks and other private financial institutions. For them, increasing the money supply led to more deals they could skim transaction fees from...

Of course, one can't ignore the Greenspan put, etc. but your diary suggests to me that a critical part of making such a massive bubble was the move of the control money creation into the private sector, using instruments that did not show up under many of the conventional measures of money supply. Thus the parallels between your memory of the Japan crisis and the latest crisis are rather strong.

At the same time, the decision to abandon measures which did highlight some of what was going on was just insane... who knows if that was malice or incompetence...